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We usually don't comment on other central bank decisions, but one has to say that the decision the Fed took was appropriate given the position of the U.S. economy... and it was perfectly communicated and flawlessly executed.
-ECB President Mario Draghi, January 2016
A technical trader once told me that fundamentals don't drive the markets and using it does not give traders an edge. He further stated that when the price moves in the opposite direction of what's expected, a fundamental analyst will say "it was priced in".
The fact remains that many, if not most new traders, will solely rely on technicals. Similar to all aspects of trading, fundamental analysis can be difficult to comprehend. As a result, it is also difficult to profit from it without a sound understanding.
While there are several aspects of fundamental analysis, the Federal Reserve made one thing very clear at their March meeting. I hope to convey this and how to profit during the Fed tightening cycle. This one piece of information should allow traders to profit that normally do not follow fundamental developments.
To provide a backdrop to the above quote from ECB's Draghi, it was made during a time where he had gre…
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gargantua avatar
gargantua 21 Apr.

good article

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В прошлом году я принимала участие в конкурсе Мисс Дукаскопи, , но еще хотелось попробовать свои силы во многих других интересных конкурсах, таких как конкурс трейдеров, бинарных опционов, дневных опционов и др.
К сожалению, участие в конкурсе Мисс отбирало у меня примерно по 4-5 часов в день, поэтому старалась искать способы, которые бы позволяли участвовать в других трейдерских соревнованиях с минимальными затратами времени.
Один из моих любимых конкурсов – это конкурс фундаментального анализа. На странице «Активность в конкурсах» результаты на протяжении 11 месяцев участия выглядят следующим образом:
Система, применяемая в конкурсе ФА, в настоящий момент, дает 52,3% (иногда доходило до 60%) правильных ответов. Мои друзья-трейдеры предложили способы адаптации этой системы к конкурсам трейдеров и бинарных опционов.
В этой статье попытаюсь поделиться своим опытом «торговли на новостях» в конкурсе трейдеров.
Что такое «Торговля на новостях»?
Важнейшие экономические и политические новости оказывают огромное воздействие на движения цен на валютном рынке. Поэтому система «торговли на новостях» приобрела широкую популярность как для опытных тр…
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Natalia_Kisenko avatar

MURO  muchos gracias, Jose!

massimoscalas avatar

Thanks to you for the great article!

Nihad avatar
Nihad 29 Feb.

Natalia_Kisenko Great article Natalia, keep going

Vlad73 avatar
Vlad73 29 Feb.

очень хорошая работа. удачи!

Knaz_RA avatar
Knaz_RA 27 July

Вначале писала о фундаментальном конкурсе....думал" вот статья которая научит меня тащить"!!!, эх (((

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1.0 Moment before Fed Interest Rate Increase
The market is nervous, but not for the sake of raising interest rates, as was to be expected, but because of the anticipation of the reasons that the Federal Reserve will follow this decision, since it will be formulated to predict when will be followed by a new pickup.
Aggressively raising interest rates, at which the central bank lends money to others, will increase the interest rates charged by banks to companies and might endanger the US economy, but also bring instability on the stock exchange.
Investors want a Fed indicated a slow and gradual series of raising interest rates, which will allow for periodic review of the state of the economy in order to establish that the economy is stable enough to withstand the new increase in interest rates.
Federal Reserve your interest rate to a record low slashed 2008 to help the financial system to overcome the crisis.
Fed officials in recent months announced gradually raising the benchmark interest rate, but investors want to hear on Wednesday new guarantees.
One of the factors that could affect the gradual lifting of interest is the absence of inflationary pressures, since inflation remains …
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nahimkha avatar
nahimkha 29 Dec.

USDJPY is in range.waiting to see new direction.thanks.

albertpip avatar
albertpip 29 Dec.

Like indicators on charts.Good charts - well done.

khalidam avatar
khalidam 30 Dec.

Lovely charts. Keep going.

pipericky avatar
pipericky 30 Dec.

What is your favorite pair for January 2016 ?

ImranMughal99 avatar


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FOMC Introduction

Next week is going to be a big week for all the International investors and all the Forex traders around the world, as FED is considering for an Interest rate hike from 0.25% to 0.50%. It's along the wire for so many months since the start of 2015 but got delayed unexpectedly mainly because of the global economic breakdown caused by Chinese around mid of the year.
Amid economic slowdown all round the world, things started to recover from more fast for US and US economy shows better improvement from the global economic breakdown than all other currencies. Because of this, FED again started showing some hope of rate hike before 2015 end. Once the hope rises, US more important NFP reports started beating the forecast twice (271K, 211K) which poses more strong contention to increase the Interest rate. As US data are more supportive for a rate hike, 99% we will be witnessing a rate hike next week.
Now, the important question for all the traders would be when to go long on USD and which pairs to consider. My personal advice would be not to trade during such news event to avoid big heartbeats and tension. But at the same time, we can use this by being in the market well…
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tdbatinkov avatar
tdbatinkov 26 Dec.

I succeed in my deal and take +100p on EUR/USD

ijayakumar avatar
ijayakumar 26 Dec.

tdbatinkov : That's really great. Seems you nailed it at the right time!

wisdom_consultant avatar

good article!

ijayakumar avatar
ijayakumar 27 Dec.


WallStreet6 avatar


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Fundamental analysis
Few weeks ago, after NFP (Non Farm Payrol ) report, US dollar gain was huge. Whole market started to talk about interest rate increase. Last week FOMC (Federal Open Market Committee) report gave clear picture about excellent USD results. Around 68% is probability that we can see interest rate increase in December based on several polls.
The European Stability Mechanism , intended for the rescue of heavily indebted Eurozone members, has approved today the payment of a new tranche of aid to Greece in the amount of two billion euros, after the country adopted a new austerity measures.It has approved the payment of a new tranche to Greece, after her late August paid EUR 13 billion.
Greek parliament last week passed a new austerity measures that include raising taxes on wine and raising tolls, and less protection for the citizens of mortgage loans.Athens wanted to find a way to about 70 percent of homeowners protection from seizure of real estate, but the creditors considered that the level is too generous and sought to be protected by only the most vulnerable.
This week we will have several important reports for US dollar EUR, GBP and AUD, as we can see in Dukascop…
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monjurul avatar
monjurul 29 Nov.

Nice images and well explanation.Great article. My setup is different for GBPAUD.

raulafx avatar
raulafx 29 Nov.

I want see OIL up. Lets go..

shekhasi avatar
shekhasi 29 Nov.

Great ideas. I shall use this in trading.

nahimkha avatar
nahimkha 29 Nov.

Images are very good. Setups will work maybe next year...

khalidam avatar
khalidam 6 Dec.

Excellent work my man!

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1.0 Introduction
USD Federal Open Market Committee (FOMC) Rate Decision was at June 17. This huge forex event is excellent for trading because it creates strong volatility and market direction. Trading the news is very difficult. Traders need to be nimble and prepared to close the position if price action went against them and on the other side they must calculate stop loss on right way and avoid to be "washed up" (lose position for few pips because volatility).
Trader need to be concentrated during post event speech because some important information can turn market down or up. Sometimes , FOMC rate move market 50-100 pips in one direction and then during the speech we get some new information which move market in opposite direction.
In this article I will try to describe whole process of trading.
2. Fundamental analysis before FOMC
May and June were one of the best months in fundamental view for dollar. Non-farm Payrolls were 280K with positive Retail Sales and several excellent reports. Employment stats are amazing and economy overview is in excellent shape. Personal consumption and industrial production are little bit below expected. Only industry in USA which is not in good sh…
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raulafx avatar
raulafx 17 July

Excellent work. Nice strategy.

lucadamgain avatar

Article about Greece debt and this one is excellent. I will folow your trader portoflio as well.

shekhasi avatar
shekhasi 20 July

Excellent work. Nice.

nahimkha avatar
nahimkha 21 July

Another good work...

albertpip avatar
albertpip 24 July

Great work and nice Figures.

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What is the Federal reserves plan? What is Janet Yellen thinking?
Ultimately, none of us know... We can try and predict, guess. But at the end of the day she will do what she does and we will have to react. This being said, it doesn't mean we can't have a game plan, and expect certain things.
This chart is from DBs Slok, and shows an expected route for the Fed.
Thus far, the March 6th print was strong, with Non-Farm payroll change coming in at 295k and last week we saw the word "patient" removed.
What was expected was that with "patient" removed, we should see a hike in the coming few months, and with Yellen also saying it won't be the April meeting, then we could only assume the June meeting.
Well we saw this, however it was far from the hawkish tone we were expecting, and subsequently we saw quite the move in the USD and US interest rates.
The dollar dropped an incredible 5% in just minutes.
On top of this, US 2 year yields dropped a huge 14bps
Now looking forward as per Deutsche, they expect the Fed to sit back and monitor the financial markets and data points to see whether or not there will be any irrational fears going into the 1st Hike. No so far there has bee…
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anna_t avatar
anna_t 24 Mar.

AdrianWS good job! Congratulations)

VictoriaVika avatar

Great article!

Airmike avatar
Airmike 25 Mar.

good job

mimuspolyglottos avatar

Visually perfect. I guess the Fed just wants to prove its credibility with the first hike, It wont hurt economy, could be good for bubbles preventing and good for retirees as they are the largest part of savers. With this step they'll show to the world how better they are than their japanese and european peers because they deal not only with inflation ( low, high whatever) but also have a mandate for employment targeting. I wonder, what state of US economy will justify 1% or 1.5% interest rates. Without healthy long term global growth, it is quite hard to imagine. Thank you.

speculo_ergo_sum avatar

do you believe that the Fed will hike interest rates?

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The FOMC Statement is a highly anticipated event, more so as the FED is nearing it's planned interest rate hike.
A lot of care is put into the exact wording used in the statement, so as not to cause excess volatility in the markets, or misleading information.
Trading this risk event is like playing a game of Poker with the FED, carefully analyzing every word trying to interpret the underlying message. Essentially trying to figure out the FED's cards, to determine when to go all in!
(figuratively speaking).

This article is my personal interpretation of the FED Statement of Dec. Therefore the view here may differ from other publications on the web, as the statement does carry a larger degree of vagueness.
The objective of the article, is to provide trader's that are new to the fundamental side of trading, a view of how a press conference can be interpreted, and subsequently trade the obtained information.
Figure 1 - USDJPY 5M - Showing a bullish effect prior to, during and post FOMC
To sum up the statement in one sentence, the FED see's the economy continue to improve. Everything remains inline to raise interest rates as planned. This will likely occur mid
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Daytrader21 avatar

Nice Article. This FOMC statement was indeed quite confusing at first because they where reporting the "considerable time" stance was dropped off and than they came back reporting the "considerable time" is still there used in another paragraph.

alifari avatar
alifari 30 Dec.

A well written article, well done

Jignesh avatar
Jignesh 1 Jan.

Thanks alifariDaytrader21 I think what made it even more confusing was Yellen's hawkishness in the press conference! but that is why I decided to write the article.  Hopefully provide a bit of perspective on my take.

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As we all know, the US economy is performing well to all accounts. And as such, the FOMC are going to be considering raising interest rates in the not-too-distant future. Right now, as I type, the futures market for the Federal funds rate sees the first hike at some date between Early June and September.
So that puts us roughly 9 months from the first rate hike from the Fed. The 1st in many, many years. Many junior traders and investment managers who started their career in 2007, have never seen a Fed hike - and these are the people who will now be managing directors or Portfolio managers at sizeable hedge funds. While looking at historical charts of how various assets respond to hikes is one thing, actually trading it is another. Typically a Fixed income manager will look to buy USD-denominated, short duration bonds during a hiking cycle, so as to protect themselves from the MTM impact of higher rates.
In FX, typically higher US rates act in multiple ways to benefit the USD;
  1. Higher interest rates serve to decrease (in theory) inflation, and as such, real interest rates rise leading to a high USD
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sonjatrader avatar

Very interesting point of view.Thanks :) Sonia

mimuspolyglottos avatar

After the ECB is done with MonPol, all eyes gonna pop at the Fed. What do the traders need, is to keep it simple and straightforward as you were pointing at in your article. Fight the central banks while they are sleeping (ask Soros about his know-how) or else....become a c'banker :). Good article with an exposition of the fundamental reason what is going on with the USD. Regards.

Skif avatar
Skif 26 Sep.

very nice bro!

OneGoodTrade avatar

Always original ideas. Nice work.

VictoriaVika avatar

Great article, nice written, thank you, it is great to have a more useful information for Forex markets.

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Here we go again with new “insane” levels against the dollar across the board and taper is right behind the corner to give us a trade of the lifetime. Or is it? While many planning their big long dollar of the lifetime, market movers already in their big short of their own record.
Let’s take a look to what happened trough out the year. The first wave of taper expectations started to gather momentum in June, but with unexpected Bernanke’s assurance “for foreseeable future” EUR/USD printed a record 400 pip daily candle and kept going until September. Then again – just a bit of profit taking and all the fuss in the financial media about not “if”, but “how much” taper will be announced. That day Gold had some buying right in to the moment of announcement – very suspicious developments if you believe that all market participants got “the news” at the same time.
And now – again… Couple of marginally better numbers and speculations began. Let’s face it – employment data is nowhere close to pre 2008 levels and recent two NFP prints is just a non-event, compared to constant 300-400k add-ups in older days.. But, is employment or any other macro data have any importance for the FED at all whe…
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Likerty avatar
Likerty 16 Dec.

As I pointed in the article - all the positioning is already done, as market movers probably started the proces way before.. So far looks, like markets preparing for another dollar weakness wave..

Daytrader21 avatar

Nice buddy, it seems this month many a lot of us decided to write about the Fed taper decision:). I always enjoy reading different points of view.

Daytrader21 avatar

But lets not forget I was the first one who wrote about it:))

Mani avatar
Mani 19 Dec.

very good work +1

Likerty avatar
Likerty 29 Dec.

Not much of a knee-jerk reaction, but main theme is still on the table - stocks, euro and cable - proceeding further up (Gold and Aussie will join later) and should continue untill technical targets gets reached..

orto leave comments
I choose the biggest news, when chart can move significanly, easily. I see the or other Forex news websites.For Example, start of the month: USA-ISM Manufacturing PMI, Non Farm Payroll, FOMC Meeting when FED Chairman Bernanke speaks, BOE, Bank Of England meeting or BOJ, Bank of Japan meeting.Other good news with other currencies: GDP figures, cash rate, unemployment rate etc.So the strategy is the foollowing:Before 20 or 30 minutes of the news I take orders ( buy stops and sell stops ) both of the directions approximately 30 or 50 pips to the current standing.I use max 4 currencies to handle this, 6 or more is too much and very hard so 4 enough.I see, use currencies with small spreads ( eur usd, usd chf , gbp chf, usd jpy , eur jpy,, nzd usd, or gold, oil.Small news orders: 30-50 pipBig news orders: 40-70 pipsWhen the news comes, I see it, if it is goo for the currency or against.I close orders which are not cooperated with the figures. I use small stop losses mainly 30-40 pips, because I don' t know what the market will make, so let the market run.If there is a large fundamental changing, I let the position run more than 100 or 200 pips. If the changing is not so …
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Zoli21 avatar
Zoli21 12 Aug.

Thank You very much!

agddivisas avatar
agddivisas 12 Aug.

Very good!!!

Likerty avatar
Likerty 14 Aug.

It is much esier to trade through the news when you understand technicals behind, as often news are used by market movers just as an excuse to move faster to where it was predetermined technically anyways and often - in to oposite direction than pre-news direction:)

FxMidaso avatar
FxMidaso 14 Aug.

i agree with likerty's statements, the technical is more important, the news complements the technical.
Nice article.

amerfx86 avatar
amerfx86 31 Aug.

trading news can be very risky ...but ....good article +1

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Major currency pairs rallied sharply last week to reflect improved risk-appetite within the context of renewed commitment from the US Federal Reserve and expectations of more aggressive monetary policy stance from the Bank of Japan. These gains contrasted the sharp declines of the previous week that took place amidst growing pessimism surrounding the Euro zone economy and the looming US `Fiscal Cliff` heading into 2013. The EURO USD gained just under 300 pips since the lows of that decline, together with the EURO JPY (400 pips), GBP JPY (240 pips), NZD USD (120 pips) and the EURO CAD (280 pips). Similarly, the USD CHF and the GBP CHF - which move inversely with those pairs- declined by 150 pips and 185 pips, respectively. On Wednesday, the FOMC announced that it had decided to maintain the Federal Funds Rate at the 0.25% level while also announcing that they would be replacing the expiring `Operation Twist` programme with new Treasury purchases to keep long-term interest rates low. However, the more surprising aspect of the release was the linking of the monetary policy programme to a specific target for the unemployment rate. As long as inflation and inflation expectations rem…
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When economy starts to move closer to recession and at the same time unemployment is at record levels, when the central bank lowered interest rates to the lowest level, when financial stability is shaken and the market is faced with a distinct lack of liquidity then the central bank often faces pressure to QE or some other measure in order to ensure better liquidity in the market. After the FOMC statement, we expected something more aggressive monetary easing, however, the Fed has just presented the Operation Twist, which will come to decomposition maturities and so it will sell securities maturing in three years and buying maturities from 6 years out to 30 years. The Fed also left the key rate 0-0.25%.Certainly the highest expectations of the market is to have regard to QE3, this time was not  the theme of statement, which is certainly a disappointment for buyers in commodity and stock market. On the Forex is the expectation the dollar strengthened against almost all currency pairs, so the       EURO / USD after two hours of the statement fell about 200 pips. If we look at the long-term eur/usd pair and dollar index, we will see that the situation to the global recession is alw…
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Livornese avatar
Livornese 24 Sep.

I like when somebody has an opinion and put it forward!

stomaraka avatar
stomaraka 30 Sep.

Agree with your reasoning - all cards are stacked to fall of euro, but it never is smooth one-way ride. There will be a lot of volatility, but the main trend for now is down.

Good article.

Sly_Fox avatar
Sly_Fox 12 Mar.

Good article

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